European Stock-Index Futures Drop; Air France, Holcim May Fall

By Sarah Thompson

Aug. 21 (Bloomberg) -- European stock-index futures fell, following declines in Asia, as higher oil prices weighed on the profit outlooks for airlines and carmakers.

Air France-KLM Group, Europe's biggest airline, and Daimler AG, the world's second-largest luxury-car maker, may drop. Holcim Ltd. will probably decline after the world's second- biggest cement maker posted earnings that missed analysts' estimates. Raiffeisen International Bank-Holding AG may fall after Morgan Stanley recommended selling shares in the bank.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, slid 25, or 0.8 percent, to 3,281 at 7:30 a.m. in London. The U.K.'s FTSE 100 Index is set to open 22 points lower, according to CMC Markets.

Crude rose for a third day in New York on concerns that Russian and Caspian Sea supplies may be disrupted after the U.S. agreed yesterday to construct a missile-defense system in Poland.

``A rise in oil will weigh on retail and auto stocks,'' said Oliver Stevens, head of dealing at IG Markets in Melbourne. ``We're expecting a negative open in Europe after Asia slid.''

Asian stocks fell as Babcock & Brown Ltd., the region's worst-performing stock this year, plunged a record 31 percent in Sydney after posting its first drop in earnings and its chief executive officer quit. Jim Babcock, who founded the company in 1977, stepped down as executive chairman.

The Stoxx 600 index has lost 23 percent this year on concern rising oil prices and more than $500 billion in credit- related losses by banks worldwide will stifle economic and profit growth.

Air France, Daimler

American depositary receipts of Air France ended 0.7 percent lower than the close yesterday in Paris. Daimler lost 0.5 percent.

Crude oil for October delivery rose as much as $1.14, or 1 percent, to $116.70 a barrel on the New York Mercantile Exchange.

Holcim may decline. Second-quarter profit dropped after U.S. construction slowed and transport and raw-material costs increased.

Net income fell to 696 million Swiss francs ($634 million) from 2.07 billion francs a year earlier, when the Zurich, Switzerland-based company booked a 1.1 billion-franc disposal gain. Earnings before interest and tax decreased to 1.23 billion francs. Analysts estimated 1.31 billion francs.

Raiffeisen

Raiffeisen, the biggest foreign bank in Russia, was downgraded to ``underweight'' from ``equal-weight'' at Morgan Stanley.

``Tight liquidity, an overheated property market, and the risk of deterioration in the terms of trade in 2009 reflect near-term challenges facing local banks,'' London-based analysts Ronny Rehn and Hadrien De Belle wrote in a note dated today.

Telekom Austria AG might be active after the largest Austrian telephone company was raised to ``buy'' from ``neutral'' at Merrill Lynch & Co., which said the shares are attractive after underperforming rivals this year.

The Austrian company may announce a share buyback in the fourth quarter or in the first three months of next year, analyst Jakob Bluestone wrote in a report today. The company may meet with investors around year-end and promise a rebound in profit for 2009, he wrote.

Persimmon Plc might be active. The U.K.'s biggest homebuilder by market value said first-half profit fell 87 percent after banks granted fewer mortgages, triggering the most widespread housing crash in the country for three decades. The shares have fallen almost 63 percent this year.

Eurasian Natural Resources Corp. may advance. The world's third-largest ferrochrome producer said first-half profit more than tripled after prices for the steelmaking raw material increased to a record.

To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net